Companies that have either been through past downturns or have the pricing power to offset the costs of inflation provide a crucial element of safety that unprofitable growth stocks do not have. In addition, dividend stocks can provide a steady passive income stream so that investors don't have to worry as much about short-term gyrations in the stock market. With each passing week, the U.S. stock market is demonstrating that 2022 may not be like the rip-roaring years of 2019 through 2021. According to the Bureau of Labor Statistics, inflation is 8.5%, the highest reading in 40 years. U.S. 30-year mortgage interest rates just hit 5%, a 10-year high. New and existing home prices are at all-time highs. And everything from food costs to prices at the pump are on the rise as well.
In this kind of climate, fundamentals become more important than ever. Investing in equal parts of United Parcel Service ( UPS -0.46% ), NextEra Energy ( NEE -1.33% ), and Atlantica Sustainable Infrastructure ( AY -0.64% )gives an investor an average dividend yield of 3.43% and exposure to the industrials sector, the regulated electric utility industry, and the renewable utility industry. After a period of six years, an investor could expect a $15,000 investment to earn over $3,000 in passive dividend income. Here's what makes each dividend stock a great buy now.
Source: Motley Fool
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